Varnett charter school parents eligible for restitution...

1of3The founding superintendent of Houston's Varnett charter school, Marian Annette Cluff, and her husband, Alsie Cluff Jr., the school's former facilities manager, leave the courtroom with their attorneys, Dan Cogdell and Cordt Akers. The Cuffs turned themselves into federal authorities in 2015 after being indicted on charges of embezzling more than $2.6 million from the school network. ( Dylan Aguilar / Houston Chronicle )Photo: Dylan Aguilar, Staff / Houston Chronicle

2of3Ryan K. Patrick, U.S. Attorney of the Southern District of Texas, is shown during a press conference regarding restitution in the criminal case involving the founders and operators of the Varnett Charter School Tuesday, April 16, 2019, in Houston.Photo: Melissa Phillip, Houston Chronicle / Staff photographer

3of3Ryan K. Patrick, U.S. Attorney Southern District of Texas, left, and Perrye Turner, Special Agent in Charge FBI, right, talk about making restitution available to parents who children attended the Varnett Charter School, whose founders were convicted of siphoning millions of dollars from the network.Photo: Melissa Phillip, Houston Chronicle / Staff photographer

Parents could be eligible for $110.02 per child for every year they attended one of the district’s three campuses. For example, if a family sent three children to the school for three years, it could be eligible for $990.06.

The money came from selling assets once owned by Marian Annette Cluff and her husband, Alsie Cluff Jr., who also have been ordered to pay $1.89 million to the charter school district, $1.83 million to the Internal Revenue Service, $100,000 to a Philadelphia-based insurance company and nearly $14,800 to two employees. Both Cluffs were sentenced in June 2018 and are in federal custody. Marian Cluff is serving 10 years for conspiracy to commit tax evasion and mail fraud; Alsie Cluff was sentenced to three years on a conspiracy to commit tax evasion conviction.

Ryan Patrick, U.S. Attorney of the Southern District of Texas, said Tuesday that the Cluffs billed parents for routine expenses — such as field trips and fundraisers — even though those functions already had been funded by the school. Instead of spending the money on students, the two used the extra funds to pay for lavish vacations aboard a private jet, furnish a 7,000-square-foot home in South Houston, purchase designer jewelry and fund upkeep on a ranch.

“What the Cluffs did was use this set of charter schools as pass-throughs for their own financial gain,” Patrick said.

The Cluffs founded the Varnett school network, which has grown to serve about 1,600 elementary students across three campuses, in 1984. They paid themselves exorbitant salaries, Marian Cluff for working as the schools’ superintendent and Alsie Cluff for managing business operations. Alsie Cluff also made millions from contracts and other deals with the schools. The couple reported about $12 million in income from Varnett during an eight-year period.

In addition to giving themselves higher-than average salaries, the Cluffs skimmed money parents paid under the guise of using the funds for field trips, the chance to wear regular clothes instead of uniforms on Fridays, fundraisers and materials.

“It’s particularly egregious because they not only victimized taxpayers but also victimized those who were most vulnerable in our community,” said Neil Sanchez, special agent in charge of the U.S. Department of Education’s Office of the Inspector General.

Patrick said a whistleblower alerted local authorities to inconsistencies in the schools’ finances in the early 2010s. The Texas Education Agency in 2013 found the network was rife with conflicts of interest and excessive spending among school leaders. The couple was indicted on fraud and tax evasion charges after federal officials found they were moving small deposits into an off-the-books account.

Sanchez said the restitution they owed was based on the amount of money funneled into their off-the-books account and the number of years they pocketed parents’ money. That was broken down into a per-student, per-year basis, Sanchez said.

The U.S. Attorney’s office obtained attendance records for the years covered by the restitution and will send letters to parents by the end of the week providing more information. Those who do not receive a letter within the next week or two should contact Patrick’s office.

Patrick and Perrye K. Turner, special agent in charge of the FBI’s Houston Division, said it is rare for victims in such cases to receive restitution. Often, those who commit this type of fraud use the money on vacations or items that cannot be recovered by authorities, such as expensive meals or nights out.

“It is rare when there are assets seized,” Turner said. “Often times, the money’s just gone.”

Shelby Webb is a suburban education reporter for the Houston Chronicle, covering trends across districts in Harris, Fort Bend, Montgomery and Brazoria counties. She previously worked as an education reporter with the Sarasota Herald-Tribune in Florida from 2013 to 2016 and attended the University of Florida.